J.P. Morgan analysts have announced that Meta platforms will use Broadcom’s custom chips to build its metaverse hardware in a billion-dollar business.
Broadcom’s ASIC (application-specific integrated circuit) chips will be used by Meta, Alphabet and Microsoft and expected to generate revenues of $2-2.5 billion.
“We believe these wins are primarily at 5 nanometre and 3 nanometre and will be used to power Meta’s metaverse hardware architecture that it will deploy over the next few years,” said analyst Harlan Sur.
ASICs are designed to perform hyper-specific tasks, including in AI and machine learning, efficiently. ASIC chips will play an important role when Meta develops a range of hardware products for the metaverse. These hardware products include smart glasses and virtual reality headsets.
The partnership between Broadcom and Google has led to the development of Google’s custom chip for machine learning since 2016, and the brokerage estimates that it will be worth more than $1.3 billion in 2022.